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tv   The Kudlow Report  CNBC  March 4, 2014 7:00pm-8:01pm EST

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most importantly all the prospective jurors. we had a great time. and i did the civic duty and liked it. i'd like to say there's always a bull market somewhere and i promise to try to find it for you here on "mad money." i'm jim cramer and i'll see you tomorrow. edition beginning right now. >> good evening, i'm larry kudlow. this is the "kudlow report." we're live at p.m. eastern and 4:00 p.m. pacific. it was the best day of the year for the dow. markets in rally mode as ukraine tensions seemed to ease.
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bob joins us live with much more. >> this was a classic relief rally with historic highs in the s&p 500 but more than that, the highs in the mid cap and the small cap, the russell 2,000. this was a broad rally. we had roughly six to one declining. nine out of ten sectors in the s&p 500 were up. that's very unusual. health care was up as much as cyclical groups. a lot of traders assume the tension and the ukraine thing would go on a lot longer than this. it's not over obviously but there's a sense there's been a deescalation. the volatility dropped because of that. it shot from 14 to 16 yesterday and back to 14 today because even though it's unclear what the scope of the russian military action might be, an outright invasion of the whole country with tanks for example
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rolling into kiev looks unlikely. if this story stays relatively quiet tomorrow, the attention is going to quickly shift to friday's february jobs report. everybody knows the survey week they did it in was a bad payroll week so that would be quickly discarded. a strong report would move the markets to new highs likely and that's the pattern, larry. blame it on the weather, dismiss it. the good news, keep going, the trend is up and the market is up 7%. >> i got one for you. we know that vladimir putin owns a lot of stock. the guy is a wealthy few. i'm sure he stole it all from somebody. we know the oil agarks, according to a good source, a good reporting index, the russian ol agarks including
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putin lost $12.8 billion yesterday. they went to putin and said you got to help us out and relieve tensions and of course putin himself, got knows what he owns. he probably lost another 12.8 on his own account. how about this for a theory, he had to pull back because he and his pals are going bankrupt. >> there's something to be said for the whole economics over the global political issues. we saw foreign capital flight, we saw the ruble getting crushed, sanctions on him. i'm sure all of those issues was a factor in his thinking. >> i say that only tongue in cheek by the way. what he owns we'll never know. so the good thing, vladimir putin calling off the russian army dogs from invading the eastern ukraine. let's go to ian williams who is in kiev. >> good evening, larry. we saw the first shots fired in this crises during a tense
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standout outside a military base in crimea that had been sealed off by russian soldiers. about 300 ukrainian soldiers unarmed who work inside that base marched to the front gate, the russians edgy fired shots above their heads and indeed threatened to shoot them in the legs. thankfully it was diffused before anybody got suhurt. earlier in the day president putin in a combative press conference denied there are any russian troops occupying crimea. that press conference, those comments, were derided by john kerry, the secretary of state visiting kiev today. he had come to lend support to the interim government here and also with an aide package, offering $1 billion of loan guarantees as well as american expertise with the central bank, with organizing the elections. he visited the barricades on the
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edge of the square here which have become a shrine to those who died, many of them shot by snipers. although this american aid seems to be a lot, $1 billion, there is going to need to be a big contribution from imf and also european partners if it is to be stabilized ahead of those elections, larry. >> thanks, ian williams in kiev. we appreciate it. okay, it was a great day on wall street, but we may not have seen the last of vladimir putin. for me it's kind of putin versus profits. it's a tough choice. let's get right to it with my all star panel, stephanie link of the street and chief investment officer of jim cramer's charitable trust and we welcome to the show president of babson capital and bob pisani is going to hang out with us which is a lovely thing.
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electric talk about distribution. everything went up today and that includes the mid cap and small cap indexes. is there a signal there? >> no. i should think the market, there's this melt up in this rally, this relief over what didn't happen in the ukraine and i don't think it's over. i think that the large as set manage percent that are looking to raise cash are doing it methodically. how anxious are you to buy it. they're offering and offering and not putting pressure on the market but letting it go higher. makes perfect sense but i think it's going to be overdone. >> i thought if the mid caps and small caps are outperforming the big caps that's particularly optimistic and bullish. is that right? >> it points to better u.s. growths. they tend to be more u.s. centric. so to me that goes back to the u.s. economic data which is very
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important and in january, early february, it was not so great and actually since then it's starting to get better. we had a better chicago pmi, better consumer sentiment, decent auto sales, particularly in the second half of february if you talk to all the companies. you talk to the retailers and they said when the weather got a little better, that demand improved. we had better durable goods, decent business investment. >> you're cherry picking nicely. those are in the notes, right? >> i asked and pmis have not been that good in the last couple of months. the housing hasn't been that good and jobs -- >> durable goods aren't that good. >> my point is that we had a whole bunch of bad news in the beginning of january and february -- >> hang on one second. we've got breaking news from reuters. reuters reporting the united states will not participate in
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the g8 summit in sochi scheduled for june, according to reuters according to a senior administration official. this is a very important point. i'm going to bring this up in our diplomatic section, too. let me go to cliff. we have not seen the last of vladimir putin because although he pulled back from invading eastern ukraine, at least for the moment, he is running crimea, his troops did not go to the barracks in crimea. they're on the streets, on the railroads, everywhere standing and there could be a lot of trouble there. so i think that the united states is saying you either get out of crimea or we're going to get out of the g8. i like this. this is obama being tough for a change. what's your take here? >> i think, larry, stepping back, sunday night the markets sold off hard.
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yesterday they looked at the size and the scale of these countries. you look at the size of ukraine it's 25 bases points of one percent of the russian gdp. russian is two and a quarter times. their economic impact on stocks is not that bad. there's more impact for european trade. >> right. i know this is a tiny economy and russia is a third world economy for its energy sector but the point is -- bob, let me go to you. the point is europe could get involved, natural gas shutdowns could get involved and these kinds of tensions have a way of rippling through. i like this reuters announcement, i'm going to assume it's true. i like the sound of it. the stock market may not like the sound of it because it's the united states being tough and kind of in your face to putin. let's face it, bob, putin's thugs have taken over the
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sovereign state of crimea, ended the legislature, ended the prime minister and therefore we've got to do something about that. >> correct. forget these statistics. the ukraine is one quarter of one percent of whatever. 1997, larry, i was down on the floor of the new york stock exchange when the tide bot collapsed and nobody was saying that tie land was an important part of the economy but the ripple effects around the world were felt in other economies. it's the butterfly wings in africa that causes storms in the united states. >> it was the anchovies off the coast of peru. i remember that inflation story. you got to go back a ways like me to the 19th century. also it was, kenny, the russian ruble collapsed in 1998. >> right. >> and that knocked everybody for a loop. i don't care how -- at that time russia was even smaller than it is today. >> right. and it was a combination in
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1998. the ruble, the debt crises, the world cup, a bunch of issues that happened that caused that ripple. certainly the collapse of the ruble didn't help. so the tensions going on now in russia and ukraine are clearly not necessarily so impactful from an economic global recovery standpoint but it's just more geo political tension. >> right. this is stuff that dries up gold. >> absolutely. >> did you hear anything in this? you don't know all the specifics. we may learn more from this reuters report but if in fact the report is accurate and the united states is not going to show up at the g8 meeting in sochi unless russia gets out of crimea, does that have any impact on your thinking for tomorrow morning or just near term? >> i think the volatility is here to stay for sure. we don't know how ukraine is going to play out. i would look as an investor and find companies that are independent of what is happening in the ukraine.
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find restructuring stories, margin improving stories, operating leverage stories. find a facebook, what does that have to do with ukraine, not so much. when it comes down two, three, five percent, you could be picking at that. buy a chevron. i think there are plenty of places -- >> they could be texting the next attack. social media plays a big role in these revolutions. go ahead, bob. >> i wanted to take up a point stephanie was making earlier. you read some of these reports for march, look at the ism report and read that carefully. it's surprising how many positive commentary we had from the respondents. they published what they are saying. i was quite surprised to see people saying business picked up significantly in the second half of february. we're trying to hire machinists, businesses better than expected. there was a whole litany and i put it on my trader talk blog and said pay attention to these kinds of stories because this is
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an indication that business is going to pick up. >> this could be good. i want to come back to that point and go to cliff again. cliff, i think people are continuing to underestimate profits, okay. and i've got a couple of charts to put on the full screen. it's going to be on the wall. i think it will make the full screen. this is from my pal, jason trener, but i've seen it elsewhere. profits are not going up simply because of buybacks, i'm sorry, that's not the deal. profits are going up because labor costs are as low as they've been. check this out. i hope you can see this on the full screen. see corporate profits as a percentage of gdp. it's about 12%, an all time record high. this is labor compensation, wages, as a share of corporate gdp. look how it has fallon from 65% to below 60%. what makes profits? margins. when your costs are below your
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prices and labor costs are the most important costs. that's what these companies have done. that's what a lot of geniuses on wall street have missed. it isn't just the fed or buybacks. it's this. labor because the market for employment has been soft and lousy, wages are so low that profits are so high and that's not going to change. >> absolutely, larry. that's what's driving the stock prices on a long-term basis. stocks are driven by profits and profits are driven by wages primaril primarily. >> 65% and when you add productivity which isn't booming but if you add one percent productivity you're lowering the wage cost more. >> absolutely. >> something called unit labor ko costs are well below even tiny inflation. that's so bullish. >> larry, i was out with one of
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the ceos of a fortunate 500 company and i said how is your productivity and he said we're going to be up two percent. i said are you happy and he said yes. are you going to hire anymore and he said no, i don't need to. in this economy with a two percent growth, that's good enough for us. that's all you need to know. i'd rather see wage gains. >> i'd rather see 400,000 jobs per month and wage gains because that's a healthier economy. but what i'm saying here, people are telling me the reason the stock market has rallied for five years is because companies are buying cheap money and using cheap money to buy back their stocks. jason and his people have shown that's a tiny portion, less than ten percent of the profit. it's all about margins and they're all about labor costs. >> that's why i said look for the companies that have operating leverage where they have room to move higher.
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you've got to have that leverage. >> you have that totally right, i have to say. >> caterpillar said today that march was the best demand that they've seen in march in four years. >> we may hear some more from putin. it looks like obama is sticking it to putin when i happen to like by the way. what's the stock market? >> the market once again gets a little nervous and backs off. i love the market long term but from i trader perspective, look for the market to back off on news like this. >> i own my index funds, my wife and i. i didn't move them sunday, monday, i didn't move them today. i hope we bash putin to death and i'm still not moving them. >> but that's all they do. they don't make those split second -- >> stephanie on they are game. ken has been on the network all
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day. cliff, thanks very much and bob, you are so kind to help us this evening. we appreciate it very, very much. >> pleasure to be with you. let's look closer at the political military story in the ukraine. our team of diplomatic experts standing by to explain the rather confusing situation union the ground, especially in crimea and eastern ukraine. president obama rolled out his big tax and spend budget today. it's precisely what the economy doesn't need. former senator jim demint is going to join us and talk about the budget and give us his response to the new piece in this left leaning politico article that asks if mr. demint is the most hated man in washington. of course he isn't. don't forget, free market capitalism is the best path to
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prosperity. we need a little bit in the ukraine. i'm kudlow and i'll be right back. in a world that's changing faster than ever, we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through,
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secretary of state john
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kerry promised $1 billion in sanctions to the fledge lg government. are we going to let stand the russian army invasion and the takeover of crimea. to me this is hugely important. here now we bring in retired army brigadier general mark kim et and former national security council senior director for defense and strategy barry pavel. i hope i have that right. mark, welcome back. some news reports are saying that the white house is putting the line out, that they're not going to the g8 meeting in sochi unless putin changes his mind and his attitude and proposal. i don't know precisely what they want him to do but i'm going to guess and you tell me, the white house wants putin to stand down in the crimea because that is still an issue. they own the crimea. they did not pull the troops out. they did not put the troops in
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barracks. they own the crimea and have disrupted its sovereignty. do you think that's what they're talking about in the white house is this. >> i don't know because they haven't been specific in what they want. if they think the actions they're taking right now are going to lead to the russian departure from the crimea, i think they've got another thing coming. crimea in general is a strategic asset to the russian navy on the mediterranean and i don't think anything can dislodge them in the near term. >> barry, let me ask you, there's a laundry list of things besides the g8, not showing up there. there's all kinds of economic sanctions being talked about, banking and financial sanctions, visa tanks. not letting the ol agarks come to the united states under the laws we passed a few years ago.
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that's pretty tough stuff. it may not be military but it's pretty tough stuff. i don't think the u.s. government, the obama administration, will stay on that path? >> i think the obama administration will stay on that path but i think you're not going to get really effective economic trade financial sanctions without involving in a very big and deep way one of russia's biggest trading partners which is the e.u., the european union, and we heard that germany is not quite on board. other european countries are not quite on board with a strangle hold of sanctions at this point. they want to let diplomacy play out, so it's going to be quite a while before we have a good sense of how strong economic financial sanctions the u.s. will do and how much pain and how much cost we can impose on him. >> this is an important point. i've been reading that britain doesn't want to go along with tough sanctions, that the
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netherlands doesn't want to go along and that germany doesn't want to go along with tough sanctions, so that means the united states are a minor trading partner and that leaves us in the cold and putin is counting on that and it dilutes whatever authority we have to press ukraine. >> that may be right but he has watched this administration for the last three years and recognized that he can get away with these kinds of actions because this administration is not willing to do, as john kennedy would say, bear any burden, pay any price to advance the cause of freedom. putin understands. he's a realist and has a strategic interest in the crimea and he's taking that calculation and realizing that he can get away with this. >> i have a lot of criticisms of past actions by president obama, too. but i just wonder, obama came out of this shoot very, very
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fast, very fast with very tough language and he continues to do so. 90-minute phone calls, talking about various potential sanctions, financial sanctions, economy sanctions, visa sanctions and of course the g8 meeting. i want to ask both of you this. i'll start with the general, has president obama learned a thing or two, has he acted more forcefully ahead of the curve this time and maybe he actually helped to push putin back in terms of invading eastern ukraine? >> well, first of all i don't think there was any chance that he was going to invade wholesale eastern ukraine. he's worried about his strategy. what you are talking about is the old british expression, we must be seen to be doing something. that's what i see happening here but the something doesn't get you the outcome. there's a big difference between the means which they're attempting to use and the outcome that they're seeking. if it is clear that the outcome
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is remove the russians from eastern ukraine and the crimea, then nothing that's being done at this point is going to lead to that outcome. >> let me ask barry, i'll give you the last word on this. do you think there's going to be a full scale, ongoing showdown between the united states and russia? >> that's up to mr. putin and if he moves any forces whatsoever in a hostile way into eastern ukraine we're in for a different era. it's a more dangerous era. we would have to strengthen our deployments in poland and romania and other places. so i think the ball is in his court. i agree with mark though, not a lot of tools right now to exert leverage on getting his forces out of crimea. i think the key is dissuade him from any movement whatsoever towards eastern ukraine. because then you have a full-scale potential civil war and then you have a very insecure europe for the first
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time since 1991. >> we'll leave it there. gentleman, we appreciate it very much. we'll have much more on the ukraine situation later in the program. up next a new report says team obama about to impose another key obamacare delay for so-called substandard health plans. it's totally political, creates massive confusion and i say it's not reason for a full-scale moratorium on the full business. better that koons will have the story just ahead. ♪
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welcome back to the "kudlow report." i'm bertha with this news alert. moody's commentary makes this interesting. moody's sites chicago's massive pension liabilities as threatening the city's solvency unless there are major changes. a potential change in obamacare. it could be that if you look your plan, even though it doesn't comply with aca requirements, you may be able to keep it next year, too. the hill reports that the obama administration is on the verge of announcing yet another extension on those plans, that the president once called substandard because they don't include benefits stipulated under the affordable care act like exchange plans do.
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the president back pedalled in november after the public outcry from folks who received cancellation notices during the botched rollout of healthcare.gov. >> the bottom line is insurers can extend plans that would otherwise have been cancelled in 2014 and can choose to reenroll from the same kind of plan. >> no comment from the white house or health officials but last fall the administration did give itself the option to extend beyond 2014. open enrollment runs through this month and insurers are expecting another big surge in signups at the last minute, larry, barring an extension of the open enrollment period itself. >> which is going to happen. there is going to be an extension just as the president has extended the renewals of the originally cancelled policies. all this creates, in my view, it's my editorial, confusion, uncertainty and it's expensive to keep rewriting these
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policies. >> right now as they go into the spring they need to think about how they're going to price their plans. mark bert lienee said there had been discussed that they might extend as much as three years. >> that's why i've called for a three-year moratorium on all of these. three years come back with a whole different plan, look at these mandates, take a look at these tax penalties, the employer, take a look at the individual, all this stuff -- >> you're assuming that congress will actually get something done. >> i believe they're running scared like the white house is running scared as they should. many thanks to bertha. president obama had another busy day, he released his 2015 budget plan but first he had strong words for vladimir putin and the russians but he hasn't always been stern with moscow. remember this exchange with mitt romney during the 2012 election.
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>> a few months ago when you were asked what's the biggest gey political threat you said russia. the 1990s are asking for their political policy back. >> i'm not going to wear rose colored glasses when it comes to russia or mr. putin. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates. you can't always see them. but it's our job to find them.
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president obama introduced the 2015 budget today. he pitched nearly $500 billion in new business taxes and an overall tax hike of a trillion dollars, exactly, precisely, what the economy does not need. joining us to talk about this, my good friend jim demint. he's out with a brand new book called falling in love with america again. always an honor to have you on the show. it's inconceivable to me in a subpar recovery, subpar jobs, subpar everything that with a straight face, team obama can put out a budget that raises taxes by a trillion dollars. taxes on the rich, taxes on businesses. it's incredible to me. >> it is hard to believe. i write about it a lot in the
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book because you can look at states that do the kinds of things that you talk about all the time, larry, lower their taxes, lower the size of government, decrease their debt, develop their own energy, create freedom in the workplace, we see states like north dakota that are booming. instead the president is talking about mandating the minimum wage and raising taxes. if you want people to make more money, you do what north dakota and other states are doing. you create a good environment for the economy to grow. >> that's a great contrast, this red state contrast. sam brownback in kansas, mary fallin in oklahoma, john casic in ohio. they're limiting government, reforming programs, lowering tax rates to get better investment in companies. what's so hard about this? john f. kennedy did it 50 years
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ago. ronald reagan about it 30 years ago. >> they believe so much in central government, central economic planning. they believe it's unfair for people to be making a lot of money when the aspiration of every american should be to make more money, get on that ladder of opportunity. it's so frustrating, larry, to be on the inside and working with these people when they don't think debt matters. the president is increasing debt, almost doubling it over the next ten or 12 years. it's incredible, given the fact that he's amassed more debt as a president than all the presidents before him combined if you take it through the rest of his administration. >> i think if the economy would grow with fresh incentives and regulatory roll backs and we get back to four or five percent post recession growth, that debt would be absorbed by the economic growth. >> you're right. >> you have a new book called talking about freedom and opportunity. let me talk to you about the
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heritage foundation. you're the president of the heritage foundation. there's also the political action committee heritage action. some people are asking this as you well know. can you say the heritage foundation is going to stick to research as it has historically and it's going to be a political action committee but there's in effect a chinese wall between the two. >> there really is. the way it works is we do research, develop innovative policies. we're emphasizing more of communicating these ideas to the american people in a way that they can connect them to their lives. so we have an education miss and the mission of heritage action, it's a separate organization, is to take those policies that we develop to the hill, to the american people, through organizing grassroots. they are directed by what we do, even though we don't direct them. their mission is to carry our policies to capitol hill. >> they're making decisions that are independent.
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you're not involved in their political decisions, is that true, is that fair? >> this is fair. we're not involved with the score card, with organizing people around the country. i'm very proud of what they're doing. one of the reasons i came to the foundation is that heritage action gives us a better opportunity to take our ideas to market. so some people don't like the accountability and the promotion basically that heritage action does of the policies, but frankly, i think the people on the hill need to get used to a little more sunlight than they have had in the past. >> there's a lot of kib itsing about this, civil war inside the republican party and groups like heritage action and tea party groups. what you hear is that the republican approach right now, whatever, 8 months or 9 months before the election, is to keep the lights on. no government shutdown because you're going into the 2014
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elections with a lot of ammunition, including obamacare and tax hikes and so forth. what do you think about that? >> they need to keep the lights on but to run a campaign like they did in 2012 just talking about how bad obama is, is not going to inspire the american people or win the election for conservative ideas. we believe we're not shilling for the republican party. we're not a republican organization. what we're going to do is go straight to the american people because we know our ideas will unite people. we know what will happen if we start a parade towards the right ideas, political leaders will jump out in front and help to lead the parade. >> so you want a positive agenda and we're going to find that in "falling in love with america again." is that the idea? >> it reminds people that we're a ground up country. we never were a top down. you can't build a economy that you and i believe in from the
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top down. but the things that work in this country come from the american people and the little platoons that make this country work. >> i love that. i want you to come on the radio show on saturday, senator, so we can spend more time on the book and go into the details. i want you to come on the radio show. >> i'd like to work that out. we'll get back to you. >> senator jim demint. great stuff. many people are making the case that opening the door for american energy exports could be the best weapon against thugs like vladimir putin. we're going to look at what that could be, maybe the most lethal economic weapon in our arsenal. next up. speaking of american economic power, is there any show on tv that does a better job of celebrating and showcasing american capitalism than "shark tank"? one of the sharks, barbara corcoran is going to join us later to talk about tonight's "shark tank" episode tonight on cnbc. please stay with us. for retirement.
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we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours. let's talk about how the crises in the ukraine is impacting the energy markets. look at this chart of gasoline up almost 7%.
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this is why america's crude oil import should be lifted. why are we letting vladimir putin holding everybody hostage to russia's oil and gas business which by the way is really the only thing his third world economy has. let's ask the great expert john killdof. john, be honest. you're not thrilled about america going in big to the oil business? it's too premature. we're still importing almost of half of our requirement every day. thankfully a lot comes from mexico and canada so it's not the end of the world. the economics of the fracking boom are a little suspect at times. they have to drill thousands of new wells every year to keep up the pace. the wells deplete. the capital intensity of the undertaking is incredible. if interest rates tick up and the oil price were to come down even near to $65 a barrel which
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isn't that far away, that whole industry could potentially implode on us. we need to be careful with it. >> what about this. i hear you and i think there's a good point. what about exporting natural gas? this is something we've talked about for a long time. you've got to turn it into liquid and get the facilities up and it does require investment but that's more promising to me. it's cleaner, the europeans will like it more. we'll be less dependent on russia. >> the good news on all this is we're relatively energy self-sufficient or we're getting there. we're exporting a ton of fuel already. the europeans have us to thank for that. natural gas, promising venture in the future as you're saying but look at this past year. we came in with a tremendous amount of natural gas in storage and we ripped through a lot of it. we have a ways to go there, too. >> spring is coming. >> spring is coming.
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>> lng, liquefied natural gas, has got to be a part of our game plan as we move to energy independence. let's face it, these european countries spend billions and billions of dollars on goofy green energy technologies that didn't pay off and a lot of getting out of that business. why can't we help them, a, teach them how to frak, and b, liquid natural gas? >> the challenge is definitely in the cards for them. they have made themselves unbelievable vulnerable to russia between the oil itself and the fine products, the heating fuel, the jet fuel, they are almost cooked. they do need our help and we help them a lot. we're going to have to send more and more of our exports of refined products to them. they are incredibly vulnerable. we are not. lng is a huge business right now for everybody and once we straighten out our infrastructure we can get our natural gas out to them and western canadian natural gas.
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there's plenty of that. >> canada, too. thanks, john. appreciate it. i call it the most pro free market capitalist entertainment program on tv. we're just a few minutes away from "shark tank" tuesday here on cnbc. one of the sharks, barbara corcoran, is about to join us live. first, let's look at one of the pitches barbara and the other sharks will look at tonight. you'll find out how she reacted to it when we come back. >> fastest growing water sport in the world is something that each of you could master in about 20 minutes. it's called standup paddle boarding. bullet. right where it needs to be. coach calls it logistics. he's a great passer. dependable. a winning team has to have one. somebody you can count on. somebody like my dad. this is my dad. somebody like my mom. my grandfather. i'm very pround of him. her. them.
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the american dream is alive and well in the latest prime time hit show to come to cnbc tuesdays. "shark tank" celebrates capitalism with self-made successful sharks ready to help other entrepreneurs make their mark if they can make the sale. here's how our next guest responded to that pitch we showed you earlier. take a look. >> timeout. i can't hear another word. >> okay. >> you're probably the worst presenter i've ever met. >> come on, just because you don't get it doesn't mean he's a bad presenter. >> come on. i've built so many websites and i've hired like all these guys. they come in the night and talk jibberish. if you don't get what they're
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saying they get your wallet. >> barbara, that's ridiculous. >> it's not ridiculous. i've had bad experiences with guys that talk like this. i don't get it. >> here now is "shark tank" shark barbara corcoran, founder of the corcoran group and author of shark tales. i thought you were exactly right. if i guy can't communicate, why would you give him money? >> why did i have to talk so fast? i couldn't figure out what i was saying. >> what's his pitch? did you understand that part? >> i knew what his pitch was. he wanted to sell you a board that was the latest rage everyone was going to jump on and pay a lot of money for. it's not about the pitch. it's about how it's executed and that guy was dancing left and right and you just couldn't trust him. you could picture him easily running away with your money. >> that's a good character insight. you look for that in this program. how do you know? i'm talking to you, i'm looking at you straight in the eye. we've interviewed before.
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but if i came to you and i said i've got the greatest idea coming, how would you know that i might take the money and run? >> i could tell just looking at you you would be the wrong guy to invest. you wear a bright red tie and you wear the glasses and we know your vision is okay and then you have to big laugh that nobody would trust. i would never let you have my money. >> people have invested in me. >> i'm just having fun with you. >> let's take this guy, how did you know? >> many common sense things. he didn't make good eye contact. he didn't really answer the question. when he was groping for a number, you could see him reaching out of the sky and throwing it out you. he was too exact in every single thing he said and he never made eye contact. that's a bad sign. would you give him your money? >> no. i think the eye contact is really important. why did mark cuban disagree with you on this? >> because mark cuban buys into
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anything that has anything to do with an athlete or exercise equipment. that's his sweet spot and there was a girl in a bikini standing there. >> what was she doing? >> she was looking good. >> did that help or hurt your case? >> it didn't even measure in. but let me tell you when a good-looking girl comes in she has a good shot at being bought. >> being bought? >> not that way. she has a better chance in being invested in. >> it's showbiz. >> it's superficial. most of the businesses that i've invested in have been guys and they're all good looking, too, so it goes both ways. >> let me go back to the idea that he didn't talk very well. there's a lot of nonverbal people out there. many of them have started highly successful social media companies for example. you don't know what they're saying. how do you make a judgment if a
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person is nonverbal but has a good point. >> you have to answer questions. you have an opportunity particularly in that venue of seeing someone attacked and see how well they hold up to obstacles. i've never met an entrepreneur who has ever succeeded in any business unless they're really good at taking a hit and getting back up. you see people roll over on that show all the time. >> we showed the clip and you're beating the hell out of him now. the guy responded to you. did you come back and pound him some more? >> i don't think. do you have the tape? i can't remember what i did. if you are going to show me again -- >> i don't want to beat him up tonight. do you take these people apart? it's a shark thing, right? >> not at all. i'm the shark with the heart. in fact, if there's a business that's not being bought the sharks chant barbara, barbara. they think i have a soft touch and very often they're right but
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not when somebody is shifty. >> not when they're shifty. what's the biggest investment you've made on the show. >> biggest and most successful. cousins maine lob ter. i have invested $50,000 and learned $250,000 and they've given me 7%. >> thanks for watching, everybody. shark tark starts right after this. across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com some brokerage firms are but way too many aren't. why? because selling their funds makes them more money. which makes you wonder. isn't that a conflict? search "proprietary mutual funds".
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(man) the sharks are back. they're looking for the best products and businesses america has to offer. and tonight, guest shark lori greiner joins the tank. i'm gonna write you a check right now. hopeful entrepreneurs come to the shark tank seeking an investment to start, grow, or save their businesses. tell me about sales. no sales to date. why should we invest in you? sales from a $10,000 investment were $120,000. if the sharks hear a great idea, they're ready to invest, using their own money... i have $400,000. i've just put it on this table. let's pretend it's there. and fight each other for a piece of the action. if i walk, you lose the tv, and the tv isn't easy for mark. actually, i own two tv networks, so that's not the problem. let's talk about reality here, buddy.

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